CAPITOLA — One change to the city of Capitola in discussion this year is the future of the Capitola Mall, a project the mall’s owner Merlone Geier Partners calls the “Capitola Town Square.”
Merlone Geier, a private real estate investment company, plans to tear down the mall and create an open-air town center with new features that include outdoor gathering areas, a main thoroughfare, shopping, a movie theater and affordable housing.
“We are very excited about the project moving forward,” Stephen Logan, vice president of development at Merlone Geier, told the Sentinel in an email. “We are excited to get formal approval by fall next year and then start the process of moving the project forward to construction.”
Completed in 1977, with an expansion in 1989, the Capitola Mall expands across more than 46 acres bordered by 41st Avenue, Clares Street and Capitola Avenue. Merlone Geier bought the mall from former owner Macerich Co. for $93 million in April 2016. Macerich had owned the mall since the early 2000s. Merlone Geier now owns the majority of the mall, excluding anchor tenants Macy’s, Target and Kohl’s. Merlone Geier acquired the Sears property at the mall in December 2018.
Merlone Geier’s latest design proposal would bring total developed space to 1.1 million square feet, with structures ranging from a single story in height up to 85 feet. Its plans call for nearly 340,000 square feet of commercial and retail space and 637 residential units. The commercial and retail space is the equivalent of about 72 NBA basketball courts or more than 1,100 school buses, according to real estate agency Platinum Properties. Merlone Geier hasn’t decided on what type of housing it will build, but could choose from multifamily renters, independent living and/or senior housing, according to David Geiser, Merlone Geier’s managing director of design and construction. Merlone Geier also plans to build two residential parking garages with nearly 1,100 spaces, as well as provide about 2,600 commercial parking spaces.
To accommodate new construction, Merlone Geier would extend 38th Avenue across Capitola Drive and through the middle of the mall to Clares Street, forming an active main street, the Sentinel reported. The mall owner also plans to demolish the former Sears building and about 125,000 square feet of the existing mall’s “spine,” as well as the former Takara restaurant. In addition to demolition, Merlone Geier anticipates putting in new signage, improving bicycle and pedestrian pathways and moving the Santa Cruz Metro station from the mall entrance to a spot between Macy’s and Kohl’s.
The mall project is estimated to increase Capitola’s population of 10,080 residents by about 12%, according to project plans. This population growth is expected to increase the cost of city services by about $875,000 to $1 million per year, while the mall project will also bring in an estimated $850,000 to $1.2 million per year in new tax revenues.
Merlone Geier’s search for feedback started with a community survey it conducted last year. Since then, the mall owner has presented its plans to the Capitola Planning Commission and Capitola City Council multiple times. Merlone Geier also held a community meeting in May, in which nearly 200 Capitola and county residents attended and gave their input. Attendees asked questions about traffic issues, entertainment options, senior and single-residence housing and how to keep Capitola’s culture alive.
At the last Capitola Planning Commission meeting in November, the city’s contracted design team, RRM Design Group, responded to the plans, as did the commission, attending public and Capitola city staff. At the meeting, Capitola and county residents shared concerns around housing, accessibility and Capitola culture. Attendees said that housing wouldn’t be built fast enough to meet the city’s immediate need, that more bike and pedestrian paths are needed and architecture must stay true to Capitola. Some planning commissioners expressed unease about the fiscal impact and profits the new community space would bring. No decisions for the mall’s redevelopment were made at the meeting.
The latest meeting on the mall project was a presentation to the Capitola City Council in November. Merlone Geier is taking feedback and will submit a formal development application in January, according to Logan. Attention around the project has “not yet” affected its timeline in any way, he said.
With an environmental review and final project approval, construction is expected to start in spring/summer 2021 and be completed in summer 2024, according to Merlone Geier.
This story part of Newsmakers, a series highlighting the biggest stories of 2019.
